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Walgreens Gives Theranos the Heave-Ho

Walgreens has ended its partnership with the embattled blood-testing firm Theranos, the Wall Street Journal reports.

"In light of the voiding of a number of test results, and as the Centers for Medicare & Medicaid Services has rejected Theranos's plan of correction and considers sanctions, we have carefully considered our relationship with Theranos and believe it is in our customers' best interests to terminate our partnership," says Brad Fluegel, Walgreens' senior vice president and chief healthcare commercial market development officer, in a statement.

Walgreens first threatened to end its relationship with Theranos in February after a string of articles in the Wall Street Journal raised questions about the company's technology, proficiency testing, and testing procedures and after federal inspectors from the Centers for Medicare & Medicaid Services sent the company a letter detailing "condition-level deficiencies" and one that posed "immediate jeopardy to patient health and safety" at its California lab. At that time, Walgreens said it would give Theranos 30 days to address the issues uncovered by inspectors.

Walgreens didn't follow through on that threat as it was concerned that Theranos might sue, the WSJ now says. It adds that the 40 Theranos blood-draw sites inside Arizona Walgreens stores have been the primary source of revenue for Theranos and the company's link to consumers. It also gave the blood-testing firm a "stamp of credibility," the Journal says.

According to the Journal, some Walgreens officials now think that Theranos will be facing CMS sanctions — the agency has proposed banning Theranos CEO Elizabeth Holmes from owning or operating a lab — and that that would give them cover if sued for breach of contract.